First Majestic Silver (AG) Surges 9.46% on $350M Financing and Silver Price Rally – What’s Next?

Summary
• First Majestic Silver (AG) surges 9.46% to $17.175, hitting a 52-week high of $17.20.
• Company completes $350M convertible senior notes offering, with $50M over-allotment exercised.
• Silver prices hit record highs above $60/oz, driven by a 5-year supply deficit and industrial demand.
• Q3 earnings miss (-36% EPS shortfall) contrasts with bullish technicals and sector momentum.

First Majestic Silver’s stock has erupted on December 11, 2025, surging 9.46% to $17.175 amid a record $64/oz silver price and a $350M convertible debt offering. The move defies a Q3 earnings miss but aligns with a sector-wide rally in precious metals. Traders are now weighing whether this is a sustainable breakout or a short-term spike.

Convertible Financing and Silver Surge Fuel AG’s Volatility
First Majestic’s 9.46% intraday gain is driven by two key catalysts: a $350M convertible senior notes offering and a historic $64/oz silver price. The financing, which includes a $50M over-allotment option, signals management’s confidence in liquidity and debt restructuring. Meanwhile, silver’s five-year supply deficit—exacerbated by flat mine production and surging demand from solar and electronics sectors—has pushed prices to record highs. While Q3 earnings missed estimates (-36% EPS shortfall), the market has prioritized macro tailwinds over near-term profitability, betting on AG’s leverage to higher silver prices.

Precious Metal Mining Sector Soars as Silver Outperforms Gold
The Precious Metal Mining sector has surged alongside AG’s rally, with sector leader Pan American Silver (PAAS) up 6.39% on the same day. Silver’s 120% YTD gain has outpaced gold’s 30% rise, driven by industrial demand for photovoltaics and electronics. AG’s 217% YTD return dwarfs the S&P/TSX Composite’s 28.78%, reflecting its pure-play exposure to silver’s structural deficit. While gold miners like Barrick and Royal Gold also gained, silver’s lower market cap and higher volatility make AG a more aggressive bet on the current commodity cycle.

Options and ETFs to Capitalize on AG’s Breakout Momentum
• Technical Indicators: 200-day MA: $9.09 (far below), RSI: 72.25 (overbought), MACD: 0.87 (bullish), Bollinger Bands: $9.91–$17.08 (near upper band).
• ETF/Options: No leveraged ETF data available; focus on AG’s options chain.

AG’s 52-week high at $17.20 and overbought RSI suggest a potential pullback, but the 5-year silver deficit and $350M financing provide a strong bullish case. Key support is the 200-day MA at $9.09; resistance is the $17.20 52-week high. Traders should monitor volume and implied volatility for signs of exhaustion.

Top Options:
• AG20251219C17 (Call, $17 strike, 12/19 expiry):
- IV: 80.13% (high)
- Delta: 0.5485 (moderate)
- Theta: -0.0849 (rapid time decay)
- Gamma: 0.1839 (high sensitivity)
- Turnover: $143,851 (liquid)
- Why: High gamma and IV make this ideal for a short-term rally. If silver holds above $60, this call could see 104% gains on a 5% price move.

• AG20251219C17.5 (Call, $17.5 strike, 12/19 expiry):
- IV: 85.39% (very high)
- Delta: 0.4627 (moderate)
- Theta: -0.0824 (rapid decay)
- Gamma: 0.1731 (high sensitivity)
- Turnover: $15,701 (liquid)
- Why: Aggressive play for a breakout above $17.20. High IV and gamma amplify returns if AG gaps higher pre-expiration.

Payoff Estimate: At a 5% upside (target $18.03), AG20251219C17 would yield $1.03 per contract (104% gain). AG20251219C17.5 would yield $0.53 (150% gain). These options are best for short-term traders expecting a continuation of the silver-driven rally.

Backtest First Majestic Stock Performance
The backtest of AG's performance after a 9% intraday surge from 2022 to the present shows favorable results. The 3-Day win rate is 50.66%, the 10-Day win rate is 51.97%, and the 30-Day win rate is 56.99%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 5.65%, which occurred on day 57, suggesting that AG can capitalize on intraday surges effectively.

AG’s Breakout: A High-Volatility Trade Amid Structural Silver Tailwinds
First Majestic’s 9.46% surge reflects a perfect storm of silver’s record price and strategic financing, but traders must balance optimism with caution. The 52-week high at $17.20 and overbought RSI suggest a potential consolidation phase, yet the 5-year silver deficit and $350M financing provide a strong bullish case. Watch for a break above $17.20 to confirm the trend, and monitor Pan American Silver (PAAS, +6.39%) as a sector barometer. For aggressive bulls, AG20251219C17.5 offers high leverage if the stock gaps higher. If silver’s $60/oz level holds, AG’s rally could extend—position now with tight stops.